Tag: debt

So, you’re telling me there’s a chance!

In the classic comedy, Dumb & Dumber, Lloyd demonstrates the epitome of optimistic thinking when his crush, Mary, gives him a hard truth. Forced to answer the uncomfortable question of whether the two of them could conceivably end up together, Mary admits the odds are “not good”. In fact, it is “like one in a million”, she says. To which Lloyd responds after a moment of deep reflection, “So…you’re telling me there’s a chance.”

The Federal Reserve and its cadre of economists are currently hoping the economy will make a soft landing in 2023. They would like a way out of the painful inflation of 2022 and into a comfy low-inflation, positive growth environment. The Fed believes increasing short-term lending rates are just what is needed. Current economic conditions are responding a little like Mary, however. Current data suggests the odds of a gentle economic transition in 2023 are definitely “not good”.

Halloween May Be Gone, But The Zombies Are Still Here!

In our most recent newsletter, we outlined one of the biggest challenges facing the US economy going forward: the debt avalanche. And there is no better example of the massive debt increase and it’s increasing risks than “zombie” companies.

On The Margin

There is an old adage that says “correlation does not equal causation”. Just because two metrics, or trends, move in the same direction at the same time doesn’t mean that one causes the other. But while we shouldn’t assume that correlation equals causation, there are times – on the margin – when interesting correlations should cause us to look deeper. This is one of those times.